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In 1944, all Railway companies were taken over by the Government. And three years later, when India woke up to independence in 1947, the stage was set for the integration of different Railways into smaller zones. In 1948, immediately after independence, there were as many as 42 different railway systems - a multiplicity of railway administrations, varying in size and standards.

The regrouping proposals put forward by the various committees were studied in great detail to ensure that a unification could be achieved with the least disturbance and dislocation. Important associations of railway-users, Chambers of Commerce and Industry, the State Governments and acknowledged experts both in India and abroad were fully consulted.

Shri N. Gopalaswami Ayyangar - the then Minister for Railways, was the principal architect of the regrouping of Indian Railways. In December 1950, the Central Advisory Committee for Railways approved the plan for Indian Railways into six Zonal systems, namely, the Northern, the North-Eastern, the Southern, the Central, the Eastern and the Western.

The Southern Railway zone 9,654 kilometres (5,999 mi) was the first zone to be formed.[3] Created on 14 April 1951 by the merger of the Madras and Southern Mahratta Railway, the South Indian Railway and the Mysore State Railway, the economic and geographical factors of this zone facilitated an early integrated network. This amalgamation was a major step towards streamlining and organizing the working pattern of the Railway system.

Shri K R Ramanujam was appointed the first General Manager of the newly formed Southern Railways.

The zone operates both passenger and freight trains. The biggest station is Chennai Central. Other important stations include Chennai Egmore, Trivandrum, Coimbatore, Ernakulam, Madurai, Trichy. Passenger trains range from day intercity trains to overnight trains, long-distance trains to other zones, shatabdi and passenger trains stopping at many stations. The zone owns a large amount of coaches. These are maintained at coach care centres. Basin Bridge coach care centre serving Chennai central is one of the biggest in the country. Most major stations have a coach care centre. The stations which don't have such facilities are served by trains through sometimes complex rake-sharing arrangements which also increases the utilization of the coaches. Apart from these centres, the zone has MEMU and DEMU car sheds. These are available in Avadi, Trichy, Erode, Palakkad and Kollam. The zone also operates suburban system in Chennai.

Freight operations mainly include container traffic from all the ports falling under its jurisdiction ( Chennai, Mangalore, Ennore, Cochin, Tuticorin are some of the major ports) and coal-traffic bound to the thermal power stations in Tamilnadu state from the ports. Cement plants also use the railway system extensively. Food grains are also transported through freight trains. Most of the lines inside ports, thermal stations, manufacturing industries and owned by the respective companies and the zone provides a link connecting its network and the wagons and locomotives. There is a wagon care centre in Tondiarpet, Chennai.

The zone has electric loco sheds at Royapuram, Erode and Arakkonam. Diesel loco sheds are present at Tondiarpet, Golden Rock, Ernakulam and Erode. Most of the important routes are electrified and only low traffic lines are unelectrified. However, it is not uncommon to see diesel locos in electrified lines due to various operational constraints. It is also common to see other zones' locomotives operating inside the zone and vice versa.

Since the zone has little freight traffic compared to other zones and huge passenger traffic (which are run at low fares across the country), the zones' finances are often in a bad shape.[4][5]